“Then Again, Where Have All The Corporations Gone?”

Forty percent of the Fortune 1000 companies in 2000 no longer existed in 2010. In July 2015, in an interview on CBS news, John Chambers (retired CEO of Cisco) predicted another 40% of the Fortune 1000 in 2010 would be gone by 2020. The current evidence supports his prediction.

“The Speed of Adapting to the rapidly changing environment is the new metric for competitive success” — John Chambers

“The rate of change is accelerating and will continue to do so indefinitely.” –- Alvin Toffler, Futurist

“It is not the strongest who survive, or the most intelligent. It is the most adaptable.” –- Charles Darwin

Their failure is no mystery. The postmortem research clearly shows they failed to close the adaptability gap. The adaptability gap is the gap between an organization’s performance and the performance required for success in our turbulent, rapidly changing business environment.

Whether the organization “flourishes or flounders” depends on how quickly the leaders respond to an emerging adaptability gap.

Logarithmic vs Exponential Change

Generally, learning new management skills, or discovering new ways of thinking, feeling and behaving, is not linear, it is logarithmic. Initially, progress is rapid and then, as skills improve, further improvement requires increasingly more time. (See curve A above)

This is the existential leadership challenge that must be addressed by the leaders of every organization.

Market shifting, disruptive innovations follow a very different path. Generally, progress is very slow until multiple discoveries and disparate elements coalesce. Then, all of a sudden, progress evolves rapidly, that is, exponentially! (See curve B above.)

The gap between the accelerating rate of exponential change and the traditional logarithmic rate of change of an organization’s culture is the Adaptability Gap. (See shaded area C above.)

Turbulence and Adaptive Challenges

“The greatest danger in times of turbulence is not the turbulence – It is to act with yesterday’s logic.” — Peter Drucker

Yesterday’s logic is to regard these issues as technical challenges, rather than adaptive challenges. A technical challenge is any problem that can be solved by replicating a proven process within the existing culture.

Conversely, an adaptive challenge does not yield to established methodology. Its resolution requires curiosity and creativity. Adaptive challenges are only solved by experimentation and discovery; discovering new ways of thinking, feeling and behaving which always requires a culture shift.

However, the purpose of an organization’s culture is to preserve its identity, traditions, and its institutional wisdom. Organizational cultures innately resist change; thus, the logarithmic rate of change.

The exponential rate of change in the business universe is best described as volatile, uncertain, complex and ambiguous (VUCA). VUCA is a military term that describes the combat environment. Leaders have been slow to recognize that these turbulent, combat-like conditions exist in dealing with the adaptive challenges that are disintegrating so many established business organizations.

Recognizing An Emerging Adaptability Gap

The signals that an unrecognized adaptability gap is emerging are the same symptoms of other equally serious problems. It is easy to miss these signals until it is too late if the leaders are not looking for them.

Some often-missed adaptability gap signals are:

Challenges keep recurring in a whack-a-mole pattern.

Intractable problems do not yield to established practices and procedures.

Strategic initiatives are not delivering the expected results.

Leadership teams are overwhelmed with chaos and stress twenty-four seven.

Conflict or communication breakdowns occur frequently.

Enthusiasm, morale and creativity are low; turnover is high.

Either top-line or bottom-line growth is flat or declining.

Market share is declining; new products are not gaining traction.

When these signals persist over several months, leaders need to examine their existing beliefs and behaviors to see where their policies and systems are not congruent with the realities of the business environment. This is what an adaptive challenge (and the resulting adaptability gap) looks like.

Closing the Adaptability Gap

“The organizations that survive the future will be those that are capable of changing as fast as change itself.” – Gary Hamel, Professor, London School of Business

If, as a key leader in your organization, you have not encountered any adaptive challenges (and their ensuing adaptability gaps), be alert and get prepared. Your business universe is changing so rapidly that technically driven, adaptive challenges will soon show up – possibly as a Black Swan!

Creating the extensive culture shifts required to successfully deal with emerging adaptability gaps will be the subject of many future eLetters. In general, closing an adaptability gap begins with an enthusiastically engaged work force, one where people look forward to coming to work rather than look forward to the end of the day. (Gallup reports that only 30% of employees are engaged, another 50% are non-engaged, and 20% are actively disengaged.)

Closing the adaptability gap also requires moving from an Authoritarian, Command-&-Control leadership style to a Cooperative, Collaborate & Transform leadership model. It requires a low stress, safe environment that nurtures reflection, innovation and experimentation so that new ways of solving adaptive challenges evolve. (The traditional command-and-control style smothers creativity, innovation and discovery.)

The record shows that survival favors organizations whose CEO has a long-term perspective with a focus on the customer and employee engagement rather than a CEO with a short-term perspective with a focus on quarterly earnings. The long-term view enables a company to “flow” with the emerging adaptive challenges (think: Netflix), rather than just scrambling to survive quarter by quarter (think: Blockbuster).

Most organizations need to update their approach to leadership development. The prevalence of fatal adaptability gaps is clear evidence that our current leadership development methods are not as effective as they need to be. (Over 80% of the corporate leaders surveyed by Korn Ferry believe their leadership development programs are inadequate.)

End Notes:

**With full apologies to Peter, Paul & Mary. The wisdom of their 1962 hit is just as true today as it was then.

Going Forward

Join Our Eagle Tribe:

The Beginner’s Mind E-Zine is an irreverent, irregular publication for those leaders who already know it all and, from this wisdom, have the curiosity, humility and self-confidence to have their biases and blind spots challenged.

If you have not already signed up, consider joining our Eagle Tribe. This ensures that you will receive all future issues of the Beginner’s Mind e-Zine. (You can easily unsubscribe at any time.) As a reward for joining, you will receive our e-Book, The Five Elements of a Successful Leadership Development Program.

Your Feedback is Important to Us!

A Guide at Your Side:

I provide leaders with something they cannot provide for themselves. I provide a sounding board where they can safely explore the uncertainties and complexities they face. When we have only our internal conversation, we create an echo chamber and are not aware of our blind spots and biases.

I often partner with leaders – executives and business owners – to create an Essential Pause for Reflection in their turbulent, chaotic life. This reflective time for “deep work” enables 1) more thoughtful, sounder decisions, and 2) a low-stress, fulfilling life adventure.

If having a Guide at Your Side to support you as you deal with the isolation, anxiety, chaos and stress generated by the turbulent VUCA environment is something you would like to explore, I would like to get acquainted with you. CLICK HERE

We will arrange a free leadership strategy session to see if working together will help you become the leader you wish to be. So that you get the greatest benefit from our discussion, you will need to complete a brief questionnaire that tells me more about who you are, where you want to go, and what results you expect to achieve from a coaching engagement.

The assumption is often made that those in management positions are (automatically) leaders. There is a world of difference between being a manager and being a leader. Many managers are not good leaders. Many of the best leaders in an organization are not managers; they are not even in positions of formal authority.

Our university business schools have developed the Science of Management. Management, in its simplest terms, is the methodology for controlling processes to efficiently accomplish a particular task or an intended goal. Managers reflexively focus is on doing things right.

These same universities have attempted to develop the Science of Leadership. While Leadership can be learned — those who desire to develop their leadership skills can do it — I’m not persuaded that Leadership can be taught. It can be coached, but not taught. Yes, there are certain universal principles of leadership, but knowing those principles will not make anyone a leader. Leaders reflexively focus on doing the right thing.

Managers are “created” from above. A manager is a manager by virtue of the authority vested in the manager’s position from above. The manager’s authority is extrinsic to the manager. The manager’s power comes from outside the person.

Leaders are “created” from within and below. A leader is a leader by virtue of the authority vested in that person by those who choose to follow. The leader’s authority is intrinsic to the leader; the leader’s authority has more to do with “Being” than “Doing.” The leader’s power comes from within the person. (Authority is external, power is internal.)

There are many opinions as to what constitutes the Core Essence of Leadership. From our perspective, there are three attributes that define Authentic Leadership.

First, the Mastering the Art of Authentic Leadership is a life-long journey, not a destination. Your effectiveness as a leader dissolves the instant you think you have arrived.

Second, Authentic Leadership emanates more from the heart and less from the head, more from intuition and feeling, and less from logic and thinking. Yes, logical, analytical problem solving skills are necessary, but NOT sufficient for success. High Social Emotional Intelligence (SEI) skills are essential, especially Self Awareness and Empathy.

Third, Authentic Leaders must create “HOT” Relationships with those they wish to lead: “HOT” Relationships are grounded in Honesty, Openness and Trust. Trust is the corner stone of all leadership!

People willingly follow a leader because they see their leader as an authentic, vulnerable human being; complete but not perfect, knowledgeable, but not all-knowing, and most importantly, caring without being weak or smothering. (“I must know how much you care before I care about how much you know!”)

The essence of leadership is the ability to gain Buy-in to the organization’s values, vision, purpose and priorities. Without gaining Buy-in, the leader’s only alternative is the blunt instrument of coercion which is not an effective leadership tool.

In my judgment, the three keys to Mastering the Art of Leadership are to 1) hold those you lead as naturally creative, resourceful, and whole, 2) embrace the belief that “all leadership is example, …”, and 3) just accept, with gentle good humor, that our example will not always be one we want our followers to emulate!

Enjoy your Journey. A little learning happens when you are having fun!

Going Forward

Join Our Eagle Tribe:

We have a growing number of followers who are keenly interested in learning to “flow” – to be at ease — with their rapidly changing business universe.

If you would like to receive future issues of The Beginner’s Mind eLetter, click here.

Your Feedback is Important to Us!

A Guide at Your Side:

I provide leaders with something they cannot provide for themselves. I provide a sounding board where they can safely explore the uncertainties and complexities they face. When we have only our internal conversation, we create an echo chamber and are not aware of our blind spots and biases.

I often partner with leaders – executives and business owners – to create an Essential Pause for Reflection in their turbulent, chaotic life. This reflective time for “deep work” enables 1) more thoughtful, sounder decisions, and 2) a low-stress, fulfilling life adventure.

If having a Guide at Your Side to support you as you deal with the isolation, anxiety, chaos and stress generated by the turbulent VUCA environment is something you would like to explore, I would like to get acquainted with you. CLICK HERE

We will arrange a free leadership strategy session to see if working together will help you become the leader you wish to be. So that you get the greatest benefit from our discussion, you will need to complete a brief questionnaire that tells me more about who you are, where you want to go, and what results you expect to achieve from a coaching engagement.

Our clients are learning-leaders in mid-sized companies. Most are senior executives – and their leadership teams – in rapidly growing, high tech organizations. These leaders are focused on creating agile teams of engaged employees in a low stress, creative working environment. Their goal is to create a long-term, sustainable competitive advantage for their organization. They know this requires enthusiastically engaged employees.
However, before we began working together, they were plagued with one or more of the following conditions. Invest a little time exploring what we offer IF you experience any of the following:
• You, and your team, are struggling with the chaos and overwhelm of 24/7 job demands, work/family conflict, and the high stress of low job control. Do team members appear to live on the edge of overwhelm and exhaustion?
• Your areas of responsibility – the cost centers or profit centers — are not meeting their expected performance metrics. Is the performance flat or declining?
• Your team’s response to new customer expectations or an aggressive competitor’s offer is slow and ineffective. The team’s discretionary energy is low or absent. Do you get silent — passive-aggressive — resistance to strategic marketing initiatives?
• You observe enthusiasm, creativity, and morale are low. Are the unique strengths and talents of your team underutilized or misapplied?
• Do people behave like they really want to work here or do they begin counting down to 5:00pm Friday on Monday morning?
• You observe that burnout, conflict, and turnover are high. This is an infection of the “3D Virus:” Dissonance, Distrust and Disengagement.
Any of these conditions are symptoms of low employee engagement. The Gallup Company’s latest published research shows that typically no more than 30% of the employees (including managers) are actively engaged!
All strategic initiatives to improve an organization’s performance involves some combination of new technology, process refinements, and improved human performance (execution). Of these three levers, improved human performance is the most important and often the most misunderstood or neglected.
Great technology is essential, but the finest equipment, hardware and software will perform no better than the enthusiastic creativity of the people using this technology in service of exceeding the customer’s expectations.
The same logic applies to process refinements. They are necessary but not sufficient to make a strategic initiative successful unless these refinements are executed by enthusiastic employees dedicated to exceeding the customer’s expectations.
Exceeding the customer’s ever-expanding expectations requires agile teams of engaged employees performing in a low-stress, creative working environment. Creating a high level of employee engagement is the only sustainable competitive advantage.
Many leaders fail to realize that cultural inertia caused by non-engaged or disengaged employees is at the root of most strategic initiative failures. Booz & Co. (now “Strategy&”) reports that over 70% of all strategic initiatives fail and another 15% are only partially successful. Their research confirms:
“Culture eats Strategy for breakfast!” — Peter Drucker
Engaged employees are essential for the organization to change as rapidly as change itself. The culture must be evolving as rapidly as our turbulent, VUCA universe is changing!
(Click here to read more) (This continues on an inside page).

The Reality of the VUCA Universe:
VUCA is a military acronym for Volatile, Uncertain, Complex and Ambiguous. It is used by military strategists to describe the combat environment. Now it is aptly applied by business strategists to describe our turbulent, rapidly changing business universe.
VUCA is also an accurate description of our political/social universe as well. Everywhere we turn, we are confronted with Volatility, Uncertainty, Complexity and Ambiguity. The fears arising from the turbulent VUCA universe are causing wide spread questioning of all top-down authority structures. The competencies of the leaders of all types of institution are being questioned.
“The greatest danger in times of turbulence is not the turbulence – It is to act with yesterday’s logic.” — Peter Drucker
All of the intractable problems leaders face are adaptive challenges – not technical challenges. There is a clear difference between an adaptive challenge and a technical challenge. In its simplest form, a technical challenge is any problem that can be solved by replicating a proven process within the existing culture (yesterday’s logic). Conversely, adaptive challenges do not yield to any established methodology within the existing culture. They require new logic; that is, new ways of thinking, feeling and behaving.

Adaptive Challenges and “Temenos”:
Adaptive challenges do not yield to top-down, command-and-control leadership, where everyone is working harder and longer, and more intensely applying processes and technology that worked in the past.
Adaptive challenges require teams to collaborate in discovering new ways of thinking, feeling and behaving. This is the definition of a “culture shift.” Culture shifts, even small ones, only happen when employees are actively engaged!
Solutions to adaptive challenges are ONLY discovered in a psychologically safe — “Temenos” — ecosystem where “There are no mistakes, only lessons; where there are no failures, only research.”
“Temenos: an ecosystem where it is safe for warriors to remove their armor!
Temenos (Tem-en-os) comes to us from ancient Greece. It was a turbulent, VUCA society! The word identifies a sacred enclosure next to the temple where it is safe for warriors to remove their armor before entering the temple. (Armor, n. “A safeguard or protection”) In the present context, it identifies a very safe environment where everyone can be honest, open, and trust others to be the same. Temenos is essential for a culture supporting collaboration, experimentation and innovation to exist.
Conversely, employees realize any attempts to collaborate, experiment or innovate where Temenos does not exist is serious, career limiting behavior!
Collaboration, experimentation, and innovation are required to discover solutions to adaptive challenges. The more difficult the challenge, the more “lessons and research” required to discover a creative solution.

Adaptive Leaders and Their Beginner’s Mind:
We define an adaptive leader as one who quickly recognizes an adaptive challenge. Adaptive leaders have high Social Emotional Intelligence (SEI) skills: curiosity, vulnerability, and humility. They comfortably acknowledge “I don’t know the answer; what do you think?” This is their Beginner’s Mind: being comfortable with all that they do not know as well is all that they do know.
“It is only what you learn after you know it all that counts.” — John Wooden.

One clear signal that a leader is dealing with an adaptive challenge is when the problem persists after multiple, carefully designed, technical fixes. A second signal is the upward delegation of intractable problems. If the front-line people who are most closely connected to the problem don’t have the proven methodology to solve it, they have just three options. They can give up and deny its existence, or ignore it, or delegate it up. None of these are satisfactory and cause managers and employees to disengage.
The longer the adaptive challenge is unrecognized, the greater will be the employees’ frustration and disengagement. A Leader’s competence is quickly questioned when, in the absence of a Beginner’s Mind, he fails to acknowledge the reality of the situation that everyone else clearly sees.
The best strategy is to is to create an adaptive working environment – an Adaptive Ecosystem – where it safe for adaptive challenges to be acknowledged and collaboratively addressed.

Creating an Adaptive Ecosystem:
An Adaptive Ecosystem consists of agile teams of enthusiastically engaged employees focused on adapting the organization’s culture to the turbulent VUCA universe as rapidly as it evolves! Employee engagement is the foundation of cultural adaptability.
Expanding employee engagement to meet adaptive challenges requires (among other things) providing a low-stress, psychologically safe – “Temenos” — ecosystem. Employees must have the autonomy to experiment with crazy-weird ideas in service of discovering successful, creative, new ways of thinking, feeling and behaving that overcome these adaptive challenges.
High levels of employee engagement only happen when they are able to align the organization’s values and purpose with their own and they see their work as personally fulfilling. They have the freedom to pursue mastery of what they do well and provides meaning in their life.
In creating an Adaptive Ecosystem, Learning-Leaders become Adaptive Leaders. They think, feel and behave very differently in their leadership roles where the ability to gain buy-in without coercion is required for success.

The Authentic Leadership Insights Model:
The Authentic Leadership Insights model first began to evolve about 35 years ago when I was specializing in the recovery – or turnaround – of under-performing business units. While there were always technical challenges and sloppy process/procedural issues that had to be addressed, nothing produced reliable results until we effectively addressed the disengaged dynamics within the system’s relationships.
The performance improved only after we created an environmental ecosystem where all of the employees enthusiastically collaborated. It was only after the employee’s discretionary energy was available to the system that creative breakthroughs occurred. This is what employee engagement looks like.
What we discovered was this: our traditional, top-down – Command & Control – methods of doing things did not work! As leaders, we had to learn new ways of thinking, feeling and behaving. We had to move away from top-down management to what (at that time we called) bottom-up management.
We did more listening than telling. Time after time, it was amazing how much we learned once we approached our problems with a Beginner’s Mind. We abandoned the old command & control management paradigm in favor of a collaborative, values and priorities approach to leadership.
Successful recovery of any low-performing operation always requires a culture shift. The organization’s culture is “the employee’s most successful way of thinking, feeling and behaving.” Its purpose is to preserve the institutional wisdom of “the way we do things around here.” When confronted with an Adaptive Challenge, Its job is to resist the changes required for success!
Over the years, in coaching executives who were dealing with Adaptive Challenges, the Authentic Leadership Insights concepts were refined and expanded. This model has been “battle tested” in the VUCA business universe.
A complete discussion of the concepts underlying this powerful model is available for downloading in the Resources Section of this website.

Going Forward

Join Our Eagle Tribe:

The Beginner’s Mind E-Zine is an irreverent, irregular publication for those leaders who already know it all and, from this wisdom, have the curiosity, humility and self-confidence to have their biases and blind spots challenged.

If you have not already signed up, consider joining our Eagle Tribe. This ensures that you will receive all future issues of the Beginner’s Mind e-Zine. (You can easily unsubscribe at any time.) As a reward for joining, you will receive our e-Book, The Five Elements of a Successful Leadership Development Program.

Your Feedback is Important to Us!

A Guide at Your Side:

I provide leaders with something they cannot provide for themselves. I provide a sounding board where they can safely explore the uncertainties and complexities they face. When we have only our internal conversation, we create an echo chamber and are not aware of our blind spots and biases.

I often partner with leaders – executives and business owners – to create an Essential Pause for Reflection in their turbulent, chaotic life. This reflective time for “deep work” enables 1) more thoughtful, sounder decisions, and 2) a low-stress, fulfilling life adventure.

If having a Guide at Your Side to support you as you deal with the isolation, anxiety, chaos and stress generated by the turbulent VUCA environment is something you would like to explore, I would like to get acquainted with you. CLICK HERE

We will arrange a free leadership strategy session to see if working together will help you become the leader you wish to be. So that you get the greatest benefit from our discussion, you will need to complete a brief questionnaire that tells me more about who you are, where you want to go, and what results you expect to achieve from a coaching engagement.